Paytm shares continue to crash, down 42% in 3 sessions
Paytm's stock has taken a significant hit, plummeting over 42% in just three sessions since the Reserve Bank of India (RBI) imposed restrictions on its banking unit. Today, it has fallen by 10%, again hitting the lower circuit. The stock has tanked from Rs. 761.4 in the last week to Rs. 438.5 as of Monday morning. The RBI has barred Paytm Payments Bank from accepting new deposits and conducting credit transactions after February 29.
Brokerages slash Paytm's ratings and target prices
In the wake of the RBI's decision, brokerages have drastically lowered Paytm stock ratings and target prices. Jefferies slashed the target price to Rs. 500, while Macquarie cut it to Rs. 650. Jefferies analysts gave the stock an underperform call, stating, "We believe recent events will drag company's growth and elongate profitability timelines."
Paytm denies reports of ED investigation
Paytm has refuted claims of a potential Enforcement Directorate (ED) investigation into money laundering charges involving One97 Communications Ltd, its associates, or its founder and CEO, Vijay Shekhar Sharma. Additionally, news reports have suggested that the RBI may consider revoking Paytm's banking license as early as next month. However, this has not been confirmed by the banking regulator.
Don't know what went wrong, job safety assured: Sharma
Meanwhile, in his first direct communication with the employees ever since RBI announced curbs, Sharma stated that there will be no layoffs because of the central bank's order. "We are not completely sure of things... like what exactly went wrong. But we will figure out everything soon. We will reach out to the RBI to see what can be done," the founder said in a call that lasted almost an hour.
